It goes without saying, when most of us consider the future of our businesses, the market our business resides in, and the strategies therein, we immediately zero in on tech trends and competition. Ask an hotelier about the future of hotels, and they will more than likely tell you about streamlined check-ins, robots, and perhaps even something about Airbnb’s troubles. Same goes for any auto executive or banker. When considering their markets they latch on to what’s current: technology trends and competition.
However, we’re here to say that trends and competitors will often only give you a part of the picture. And, if you’re only following what your competitors are doing, you risk missing something really important. You need a contextual frame that goes beyond the competitive landscape. To truly understand your market you must go wide — beyond (but including) your company’s competition and trends, and into the greater context surrounding your market.
MAPPING YOUR MARKET’S CONTEXT
So, what makes up your market’s context? If you expand your reach with the goal of understanding of what forces are driving market changes you’ll find seven broad categories to assess. These include demographic trends, technology trends, rules and regulations, the economic climate, customer needs, competitors, and even uncertainties. To make the context easier to see, we use the Context Canvas.
Diving into each of the seven categories a bit…
- Demographic trends: What’s happening when it comes to education, employment, and social shifts? How are people voting? What about shifts in age and gender? For instance, there’s a lot of talk about baby boomers entering retirement age as well as millennials coming of buying age. How are these trends showing up in your context?
- Technology trends: What technology trends might impact your business for better or for worse (or at least not better yet)? This isn’t just about mobile apps either. How do shifts to cloud storage, AI, big data, mobile and wearable tech, virtual reality, augmented reality, etc. show up in your market? Whether you’re selling hotdogs out of a food truck or running a bank, technology will change the way you look at your business in the future.
- Rules and regulations: What rules and regulations — whether they’re new or existing ones — might affect your market? Scan the political news for these, as regulations are what politicians love to squabble about. What consumer laws are being talked about or perhaps have passed? What about security laws or even local building codes etc.?
- Economic climate: What contextual market trends do you see in the economy that might affect how your business, and others like it, operates in the future? These might even be connected with rules and regulations. How do consumers, loan rates, and maybe even commodities play into this? What about gas and transportation prices?
- Customer needs: We’ve said it before, we’ll say it again: your customers (and their wants and needs) are everything. It doesn’t matter what market you play in or what technology you’re building. It you don’t understand the needs of your customers your business will not succeed in the long run. So, what high-level customer needs exist in your market? These aren’t product needs or even your own customers’ needs. Think of these as broader customer needs, like safety, or saving money, or going to college etc.
- Competitors: What does the competition look like in your market? These might be the big competitors that everyone knows about. However, it’s probably the unknown competitors that will change the game in the future. Try to find the unexpected competition. Are there new entries? Competition coming from unexpected sources?
- Uncertainties: With any contextual assessment of your market there will be a number of uncertainties. After all, you cannot know how the future will affect the market. In this case, you’ll want to capture the uncertainties that might also lead to big changes or shifts in your market. You might even consider moving some of the stuff you added to other categories to this one.
As you map out your market context you may start to see a clear picture of today’s trends as well as weak signals that will shape tomorrow. But, when you do this properly (with your team!), you will probably also see TONS of sticky notes (our favorite tool, besides felt tipped markers) in each category. Your own clear picture really depends on what you — and your team — believe are the most important items or trends that may affect your market. After you and your team have spent some time listing everything, big and small, that you all can think of for each category, try to come up with the five to seven most important things to consider. Sometimes these come from just a couple of the categories. Other times, they’re spread around. With these in hand, dive deeper. What’s behind your choices? How will these change your market and business in the future?
KEEP ON SCANNING
Your market’s context is also not static. It changes on a daily basis — and by the minute in some industries. Today’s trends are often yesterday’s fads. At other times, they’re tomorrow’s certainty. Continuous understanding of your market requires continuous scanning of what’s going on in the market. As you further develop clear pictures of today’s context, you might also attempt to create a context for tomorrow, several years from now, or perhaps even further out. What are the differences? What do you expect to change over time? And, as only time will tell which of your assumptions have been proven true or false, plan to update your understanding of context on a regular basis.
A REAL WORLD PERSPECTIVE ABOUT MARKET CONTEXT
When Spotify hit the market, most people saw it as a direct challenge to the biggest competitor in the music industry at the time, Apple. Sure, this was part of the story. Apple helped to pave the way for most digital music companies. Though, if you look beyond Apple, Spotify’s main competitor, what you’ll find is that Spotify’s founders also used their understanding of the broader context of the music industry to build a market-leading streaming music service. That context included a cloud technology trends; customers’ want to listen to music and not necessarily own it; a changing regulatory environment (that Apple helped to create); and an economic environment that had record labels scrambling for new revenue streams.
What’s most interesting about Spotify’s founders’ understanding of the greater context surrounding their business, is that they managed to design a business that change the entire music industry. If they would have focused solely on the competition (Apple) and technology trends (cloud-based file storage) they might have built something closer to Dropbox for music — which probably would have missed the mark completely. But, rather than take a myopic view, Spotify opted for a holistic view of the market, and beat every other company in doing so.
When you begin to uncover everything that matters in your market, you’ll undoubtedly begin to see past your competition and the tech news. Working with your team and using tools, like the Context Canvas, will give you a greater understanding about the opportunities that exist. Perhaps this will even help you reframe current strategies.
So, are you ready to understand your market and crush your competition?